The demand for rental housing in Vietnam has grown significantly, driven by four primary groups of customers, including foreigners and Vietnamese residents seeking homes that suit their living, working and studying needs, says Vo Tri Thanh, director of the Institute for Brand Strategy and Competition Research.
The other two groups are the young generation, Gen Z, with changing lifestyles that emphasize flexibility and quality; and low-income individuals. Generation Z refers to those born in late 1990s and early 2000s.
Thanh made these remarks during the “Potential of Lease Apartments” workshop held in Hanoi. He noted that in recent years, renting homes has become a “hot” topic for both tenants and investors.
Thanh highlighted that Gen Z is the most influential group in shaping the trend toward renting, especially in the high-end housing segment. He attributed this to the growing number of affluent individuals within the younger generation.
Le Dinh Chung, general director of SGO Homes, explained that high-end rental properties target premium customers, including foreign experts and financially well-off individuals, particularly Gen Z. These tenants prioritize factors such as location, amenities, product quality, and the reputation of management and operations teams.
Dinh Thi Nga, hotel operations director at T&T Hospitality, said her company manages around 13 rental projects and most of the serviced apartments are located in major tourism areas.
"Before the Covid-19 pandemic, serviced apartments in urban areas were less common. However, during and after the pandemic, serviced apartments gained popularity due to their operational stability and the ability to remain open during lockdowns," Nga told the forum.
Serviced apartments, especially in major cities like Hanoi and Ho Chi Minh City, are now more attractive to investors than traditional hotel apartments due to higher operational efficiency.
Occupancy rates for serviced apartments in these cities range from 80% to 89%, compared to 68% to 70% for hotel rooms. These apartments cater to the needs of high-quality professionals, offering amenities such as kitchens, community spaces, and enhanced security.
In Hanoi, the supply of serviced apartments is scarce and is expected to remain limited for the next two years. This shortage, coupled with strong demand, has driven rental prices to grow by at least 5% per square meter annually, with double-digit percentage increases in rental rates per apartment cycle, Nga added.
Thanh emphasized that choosing to rent a home also has social significance. By reducing the demand for apartment purchases, it helps stabilize housing prices and creates opportunities for low-income individuals to access affordable housing.
Pham Thi Mien, deputy director of the Vietnam Real Estate Market Research and Evaluation Institute, affirmed the strong growth potential of the serviced apartment rental market, particularly in central areas of major cities. This growth is driven by economic development, a surge in foreign direct investment, and evolving lifestyles that value flexibility, mobility, and quality services.
Mien added that high-quality projects with standard legal documents and reputable operators would further enhance the vibrancy of the rental apartment market, particularly in prime urban locations.
